Steve Ballmer: facts on the US federal budget [video]

https://www.youtube.com/watch?v=aQoh9jdRZPM

42 86 2 years ago

This struck me from two angles: First, it's beautiful, well produced, clear, and concise representation of the federal budget including key areas like the deficit and spending breakdowns. However, it also struck me as "useless", in the sense of "I found it difficult to take away any useful, new, or actionable information". I'm not sure what Ballmer's intended audience or result was, but it must not've been me ...

Personally I would have benefited from less "moving flashy graphs" / "Steve explaining each node in moderate detail", and more "Here's one clean boring way to look at the data", "here's what X means for us / here's what people are considering because of X."

That said I respect what's being done and hope he continues to produce more informational content!

SllX3• 2 years ago

It gives people a baseline for where to start in any discussions regarding the Federal budget, whether that’s immediately actionable, it is useful to have the vocabulary to discuss the budget if you’re going to talk about it at all.

I’m occasionally having to correct people who believe and are insistent that our largest ticket spending item is the Military. It’s certainly the largest part of our discretionary budget, but if you’re going to talk about the Federal budget, it is unhelpful to disregard the non-discretionary budget that goes mostly into Social Security, Medicare and Medicaid and giving people an education on discretionary vs non-discretionary spending drags out conversations; then it’s a coin toss if that person retains any of that the next time you talk politics, or if it got muddled up in their minds by poor news reporting in-between, the news they follow to “stay informed”.

conductr• 2 years ago

It’s because he presented what could have been a single chart and did so by basically just reading the data. There was no analysis other than the tidbits about debt to GDP being at a high point. That said, great production and I hope it reaches people less familiar with these budgetary line items. If you’re aware what they are, like I am, it landed pretty flat but if you’re not familiar with them I could see it being quite informative. It’s good to build a baseline of financial literacy that I think we also have a general deficit of too.

kube-system9• 2 years ago

At first I was hopeful about the "just facts" content, but once he started making comparisons between government budgets and household budgets, I had to roll my eyes. This is a very misleading way to represent the US government's financial standing. The US government doesn't have to save for retirement, it doesn't doesn't have a lifespan, and it is in a unique position to manipulate economic markets (and ultimately even the use of force) regarding its own debt. The insinuation that government deficit spending is analogous to household deficit spending is misleading. A typical response it elicits is "well how are we ever going to pay that off?!" because people compare it to their own debt. But we're not talking about credit card debt or a car note here, we're talking about issuing treasury bonds.

PaulDavisThe1st• 2 years ago

In addition, no households issue their own sovereign currency, let alone one used as a reserve currency by a majority of the world.

wormius• 2 years ago

Jesus Christ, he does that? One would think someone of his stature had a better intelligence about that sorta thing, but I guess he just wants to do more propaganda for tax cuts. The second I hear someone make that comparison, I tap out... Well I give em a few to explain why it's not accurate. Then I tap out if the explanation of why it's a bad comparison isn't forthcoming. Shame.

rpdillon• 2 years ago

Do you see the $35 trillion in debt as a problem? How do you think it's going to be resolved?

When I see folks habitually complaining about how much the US spend on their military, and then I look at the actual budget and see that they are actually spending more to service their debt than they do on the military, I wonder what the end game is.

kube-system9• 2 years ago

resolved

My entire comment above was to argue that "resolving" the debt is nonsensical. The answer to when the debt needs to be paid off is: never. The government can issue more debt indefinitely. In fact, "paying off the debt" implies the government would stop selling treasuries, which is entirely more scary than the debt.

I wonder what the end game is.

There is no end game, ideally, the US wants the US to continue to exist, and continue to fund the things that improve conditions for their citizens.

Believe it or not, the single largest holder of US government debt is... the US government itself. And 77.1% of the entire debt is owed to domestic US entities. The US debt is mostly Americans voluntarily financing their own government. This situation isn't something to "resolve", it is entirely okay.

Debt to GDP does need to be within some reasonable bounds, but as long as our economy can support the debt, there's no reason to get rid of it, and many reasons not to.

georgeecollins2• 2 years ago

If the $35t were a problem US treasury bills would have to have high interest rates. As it is, investors around the world are happy to hold them.

Personally I think we should raise taxes, particularly close a lot of loopholes and raise corporate taxes as a first thing to do.

Dalewyn3• 2 years ago

If a household can keep on borrowing money basically indefinitely to pay for expenditures that exceed revenue, that's basically what the US's (and many others' like Japan's) national budget is.

To put it another way: America can afford to spend more than its revenue because people (Americans and otherwise, see the bond market) and countries (see prior) are (still) willing to lend more and more money. So what happens when that gravy train finally stops?

Note that it is easy to default on our debts, most prominently by just not passing a budget to pay our debts. How we are going to pay all this debt off is a very real question that needs an answer eventually. Brushing it off as "we aren't a household budget" is peak denialism.

kube-system9• 2 years ago

If a household can keep on borrowing money basically indefinitely to pay for expenditures that exceed revenue

If a household had an undefined credit limit and could take out debt to pay for any other debt, arbitrarily, and indefinitely, they'd be dumb to ever work a day in their life. But consumer creditors understand that their customers have essentially zero global power and will die someday, so the world of consumer debt doesn't work that way.

So what happens when that gravy train finally stops?

You tell me, when is everyone in the world going to stop buying treasuries? I don't think there is a date. As long as the US has a stable and powerful economy, people with money will want somewhere to put it.

How we are going to pay all this debt off is a very real question that needs an answer eventually.

The literal answer is that it all gets paid off all the time, according to the payment schedule of each individual security, but we continually reissue debt because there is literally zero reason not to.

pclmulqdq7• 2 years ago

If the US federal debt doesn't matter, why do we have taxes?

Surely, the government should just debt-finance everything and then we would all be happier.

kube-system9• 2 years ago

As I mentioned in other comments, debt-to-GDP does matter in as much as it loosely reflects the ability of the US to pay those obligations. So taxes+debt will always be able to fund the governments ability to do more than either of those individually.

elihu• 2 years ago

There's also the situation that if a household's finances are tight, they can often rectify the situation by not spending money on things that aren't essential.

If a government imposes austerity measures during a recession, it can make the recession a lot worse, because that government spending was used directly or indirectly on goods and services, creating economic activity.

which• 2 years ago

Highly recommend anyone who cares about this to do the CRFB’s Debt Fixer: https://www.crfb.org/debtfixer

In this simulation you have to make choices to bring debt to 100% of GDP by 2034. For the most part you learn that discretionary spending is largely irrelevant though has modest room for improvement in military/federal employee benefits, payroll tax rate needs to go up and probably apply to all income, most of the TCJA needs to expire, and Medicare needs to be more efficient. Which all hit politically important constituencies in different ways so nothing will get done. Obama should have done the deal with Boehner and there would have been fewer hard choices to make!

unethical_ban• 2 years ago

Hm, I'm wondering why "paid family leave" is listed as if anyone is suggesting the government pay for it.

When I have heard discussion of paid leave, it's always been "mandate companies provide it", not "federal government pays a stipend".

In "Build and support affordable housing", it lists a large increase in debt. Does that calculation take into account likely savings for local and state entities and hospitals?

I get it's a federal calculator, but it feels somewhat myopic.

I guess the same could be said by a military hawk, who may assert "Sure, cut spending by $450B in ten years, but World War 3 will cost $10T!"

roenxi• 2 years ago

Hm, I'm wondering why "paid family leave" is listed as if anyone is suggesting the government pay for it.

This vaguely reminds me of that classic "Americans will eventually do the right thing after thoroughly exploring all the alternatives" quote. The issue, at the highest level, is that the political process has agreed how much redistribution needs to happen and how much taxation is reasonable. The two numbers don't match, the situation is impossible to sustain and needs to be renegotiated - either more taxation or less redistributing.

It doesn't really matter if the redistributing is officially handled via the government or forced to happen as a direct payment from taxee to welfare recipient. That is still settling the negotiation by saying that the taxpayers need to pay more.

It is a little less administratively efficient to officially route it through the government but frankly I think that is a better idea. The US political consensus seems to be heading towards "we'll settle this by raising taxes, but we'll do it through payroll, inflation and corporate tax to try and disguise who is paying". That is a lousy strategy that will result in people getting poorer, not understanding why and lashing out randomly because they can sense at some level that they are worse off.

SllX3• 2 years ago

This is a fun game. Thank you for linking it. I just did one run-through to see what it’s like but now that I know what some of the later choices are I might adjust some of my earlier answers.

I fixed the budget by saving $13,350B dollars relative to current law. Debt would be down to 84% of GDP by 2034 and 35% in 2050.

pclmulqdq7• 2 years ago

Honestly, this game didn't let me make as deep of cuts to social security and medicare as I would have liked. The reason this game has you make difficult choices in other areas is because you can't do things like "raise retirement age for unconditional benefits to 80" or "means-test all retirement benefits." The class of people that is drawing money out of social security and Medicare (old Americans) is the richest group of people ever in history. I have no interest in continuing to funnel money from the poor to the rich.

ks20482• 2 years ago

They should let you draw a line: the federal income tax rate as a function of income. I saw some options for repealing recent tax cuts, but I want to go back to the tax rates of the 1950s.

Actually it would be neat to make something like that - anyone know where to get very detailed data on distribution of incomes? A quick search and I only see fairly course bins. I think this would need a lot of detail, especially at the high outliers.

gbacon2• 2 years ago

Almost no one paid these predatory marginal rates. People respond to incentives.

Data from the White House’s Office of Management and Budget show that federal income tax receipts as a percentage of GDP have fluctuated between 5.6 percent and 9.9 percent since 1950, despite dramatic changes in the top marginal income tax rate.

https://checkyourfact.com/2019/01/09/fact-check-90-percent-t...

Olreich• 2 years ago

Or you can apply taxes to corporations and the ultra-wealthy and drop the debt easily while expanding medicare, social security benefits, college, etc. The counter-point of "then all the companies will leave" seems unlikely considering the wealth of natural resources and high quality of living that the US offers.

We haven't really tried fixing the wealth gap since the Great Depression, so maybe it's time to give it another go.

twoodfin2• 2 years ago

The incidence of corporate taxes on the average American is hotly debated but it’s definitely well above 0.

Confiscating 100% of the ultra wealthy’s wealth would—for any reasonable definition of “ultra wealthy”—perhaps fund the government for a year or two.

janalsncm• 2 years ago

The counter-point of "then all the companies will leave"

I don’t know why people don’t apply the same logic to people. The US is a highly competitive economy because of immigrants because it is a nice place to live. If that changes because of declines in living standards, it will be harder for those big companies to attract top talent in the US.

daedrdev2• 2 years ago

I think it's more that you will have no economic growth. The 1% already pay nearly 50% of taxes, while making around 25% of the income, and raising the corporation tax lowers the income tax by a lesser amount since they often tax the same money.

We haven't really tried fixing the wealth gap since the Great Depression, so maybe it's time to give it another go.

If you look at a graph of the percent of wealth held by the 1%, most of them start in 1979 to show an ever increasing trend. But if you look at a longer graph, you will see a larger U shape over the last century, with a higher peak pre-great depression than today.

NickC25• 2 years ago

Yeah, it's quite funny that people think the corporations will just leave if you make them pay tax.

They still want access to our consumers, they still want access to the talent our universities produce, they still want the stability our economy provides, they still want to transact with the currency our military backs.

Tell them that if they want access to all that, they can pay their fair share of what it takes to provide all that.

nickpp4• 2 years ago

You can do that exactly once. Because after that - you won’t have any new startups, new companies, new wealthy people, nothing. Nobody will start any venture knowing the government is greedily waiting to confiscate it all.

Investors will redirect their funds to friendlier jurisdictions. And entrepreneurs will go there too.

One the reasons European entrepreneurs go to the USA to start startups is exactly because the USA did not try this kind of shenanigans, while their native countries did.

As Margaret Thatcher said: “The problem with socialism is that at some point you run out of other people's money”.

calculatte2• 2 years ago

The actual counter-point is that history shows us the exact opposite of what you propose will happen. "Higher tax = more money for our efficient government" is incredibly simplistic and ignorant thinking.

The fact is that lower tax rates actually result in higher tax revenue. https://taxfoundation.org/research/all/federal/benefits-of-a...

doctorpangloss• 2 years ago

This was significantly more informative than the video.

It really depends how good the forecasts on a wealth tax will be. After all, that stuff is based on inflated asset values that are unusual compared to the rest of the world.

If you believe that our medical spending is unusual here, then you should also believe that our asset values are unusual. You can't pick and choose what is unusual, if all you're doing is comparing to the rest of the world.

Without that wealth tax, does it make sense to limit the mission of many of these programs? For example, the military has a constantly expanding mission, and much of that mission is domestic welfare, do we want to cap that?

Overall it is very enlightening. You will never be the CEO of a giant corporation, and you are basically never the beneficiary of its wealth. You don't need to give a big tax handout to Apple and Google. Seems easy to deal with.

georgeecollins2• 2 years ago

The funny thing is that if the US actually reduced its debt by that much it would be a big problem for financial markets because investors like to hold US securities. The interest rate would go down because supply would be less then demand. The US has too much debt but cutting the debt drastically would have knock on effects on our financial system. Maybe create an asset bubble? I don't know.

dventimi2• 2 years ago

Highly recommend anyone who cares about this to recognize that it's easy to "fix the debt" in the Debt Fixer just by raising taxes.

zelifcam• 2 years ago

I thought Jon Stewart did a good job this week of kindly exposing how he’s (unintentionally?) pushing misleading conclusions hiding behind his “I’m just reporting the numbers” speak.

redserk• 2 years ago

Yeah, I don’t think it’s even possible to have an objectively unbiased reporting of this. The moment you have to simplify any information, you’re introducing bias. For example, I wasn’t a fan of how the income tax bracket levels were chosen —- $150k doesn’t go that far in a lot of HCOL/VHCOL areas.

That said, I think these videos do a decent high level overview and have led me to search for more information, especially on immigration. I think this project is most effective when used as a starting point for further research.

shove• 2 years ago

It was a lot more objective than I anticipated, but if you know how to look at such things, the propaganda is definitely in there.

dventimi2• 2 years ago

I stopped watching at the 12:30 mark.

mihaic• 2 years ago

So the US borrows annually around $1.6T and pays in interest almost $0.7T. That means that it's burning $0.7T yearly to increase the debt by a trillion? And the entire amount of taxes collected from corporations is less than two thirds of the interest?

I learned more than I was expecting from this.

Steve Ballmer: facts on the US federal budget [video]

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